Details of a top secret accord that was allegedly signed between the China Road and Bridge Corporation (CRBC) and a ghost entity comprised of local shareholders to run the Standard Gauge Railway (SGR) have surfaced.
The Sunday Nation attested that despite the information in the public domain which declared that CRBC would run the trains for 10 years, a special purpose operating company - Africa Star Railway Operation Company Ltd, was set up in May 2017 to run operations as well.
“Kenya Railways acknowledges that the operator intends to create, no later than twelve (12) months after the execution date, a special purpose operating company incorporated under the laws of Kenya to act as the operator under this agreement,” a section of the classified documents declared.
Reports further disclosed that CRBC was the majority shareholder in the ghost company which has been reportedly minting billions of shillings from the national railway through interests and dubious fees.
Mysteriously, the local stakeholders and their identities were unavailable at the offices of the Registrar of Companies in Nairobi.
Details of what appears to be a one-sided contract published on the local daily articulated fines and fees paid to the company shrouded in secrecy.
"Last month, the operator sent Kenya Railways a fee note of Ksh30 billion, which it claimed was in reference to pending payments, with Ksh800 million out of it made up of penalties for late payments," an excerpt of the report divulged.
In addition, the confidential contract apparently unchained the operator from all liabilities, with Kenya Railways obliged to pay a fixed monthly service charge.
The Sunday Nation declared that confidential sources from within the Transport ministry had informed them that the lop-sided deal was signed at the White Sands Hotel in Mombasa only hours before the launch of Madaraka Expresses' maiden trip.
According to the report, delays in launching the line would result in a fine of Ksh24.2 million each day after the agreed upon commencement day.
During the first six months of operations, the leaked data alleged that the government of Kenya lent the ghost operator Ksh3.5 billion without interest, with a special reserve account also put in place and funded with Ksh3 billion as a cushion for the operator.
The damning report went on to point out punitive clauses within the contract such as payments assured to the mysterious operator even if the SGR ceases to operate.
